9911796707
TMI Blog2024 (6) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... er, O/o the Principal Commissioner, GST & Central Excise Commissionerate, Guwahati [the respondent no. 3] and the appeal proceedings which emanated from the appeal preferred by the petitioner as appellant against the Order-in-Original dated 01.03.2022 culminating in an Order-in-Appeal bearing no. 528/GHY[A]/COM/ST/GHY/ 2023 dated 21.09.2023 of the Commissioner [Appeals], CGST, Central Excise & Customs, Guwahati [the respondent no. 2]. 1.1. The Order-in-Original no. 61/Addl. Commr./ST/GHY/2021-22 ['the Order-in-Original', for short] dated 01.03.2022 passed by the respondent no. 3 [hereinafter referred to as 'the Adjudicating Authority', for easy reference] was against the interests of the petitioner. By the Order-in-Appeal bearing no. 528/GHY[A]/COM/ST/GHY/2023 ['the Order-in-Appeal', for short] dated 21.09.2023 of the respondent no. 2 [hereinafter referred to as 'the Appellate Authority', for easy reference], the appeal preferred by the petitioner as the appellant under Section 85 of the Finance Act, 1994 against the Order-in-Original was dismissed, thereby, upholding the Order-in-Original passed by the Adjudicating Authority. 2. It has been stated that the petitioner, M/s Brahma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services other than those specified in the Negative List of services under Section 66D of the Finance Act, 1994 during the Financial Year : 2015-2016. It was alleged that the noticee-assessee had suppressed the actual value of services provided during the said Financial Year : 2015 - 2016; did not fully disclose its liability in ST-3 returns for the said year; and had consequently short-paid Service Tax dues to the tune of Rs. 1,34,54,383/- in violation of the provisions contained in Section 66B, Section 67, Section 68 and Section 70 of the Finance Act, 1994 r/w Rule 6 of the Service Tax Rules, 1994. It was further mentioned that from the data shared by the Central Board of Direct Taxes [CBDT], it was apparent that the noticee-assessee received monetary considerations and made required declarations under various sections of the Income Tax Act, 1961 relating to provision of services and TDS deductions. Those were found reflected in the Income Tax Returns of the noticeeassessee but the noticee-assessee did not declare those receipts against provision of services in the periodic ST-3 returns for the Financial Year : 2015-2016. It was mentioned that the same had resulted into non-pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference of Rs. 8,50,586/- in the value of services as per the Income Tax Return and the ST-3 returns, it deposited the said amount on 26.07.2016. 3.5. In the proceedings before the Adjudicating Authority, initiated with the Demand-cum-Show Cause Notice dated 26.04.2021, the petitioner was represented by its Tax Consultant and Authorized Representative. The petitioner has stated that in the course of personal hearing, held on 17.02.2022, it was contended that the liability on Service Tax had been discharged on the actual value of services amounting to Rs. 31,18,68,087/- by presenting a break-up and by placing the supporting documents. 3.6. The Adjudicating Authority had passed the Order-in-Original confirming the demand of Service Tax including cess amounting to Rs. 1,34,54,383/- under Section 73 [2] of the Finance Act, 1994, by rejecting the grounds urged on behalf of the petitioner. The Adjudicating Authority had ordered payment of interest on the afore-mentioned confirmed amount at the rates applicable in terms of Section 75 of the Finance Act, 1994. In addition, the Adjudicating Authority had also imposed a penalty of Rs. 1,34,54,383/- in terms of Section 78 of the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government Counsel [CGC] for the respondent no. 1; and Mr. S.C. Keyal, learned Standing Counsel, CGST for the respondent nos. 2 & 3. None has appeared for the respondent nos. 4 & 5. 6. Mr. Das, learned Senior Counsel appearing for the petitioner has contended that the principles of natural justice have been violated by both the Adjudicating Authority and the Appellate Authority during the course of the proceedings leading to the passing of the Order-in-Original and the Order-in-Appeal respectively. 6.1. In elaboration, reference has been to the Demand-cum-Show Cause Notice wherein the Adjudicating Authority had mentioned that the noticee-assessee [the petitioner] was asked to submit certain documents vide a Letter bearing no. C. No. IV[18]01/ST/3rd party/IID/20 dated 04.09.2020 for ascertaining the petitioner's actual Service Tax liability during the Financial Year : 2015-2016. In that connection, the Adjudicating Authority had also recorded that the petitioner had failed to submit the documents till the date of issuance of the Demand-cum-Show Cause Notice. It has been contended that no such Letter dated 04.09.2020 was ever served on the noticee-assessee [the petitioner]. It has, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elatable to any of the five grounds, mentioned therein. The wilful mis-statement and/or suppression of facts, allegedly attributed to the petitioner, were relatable to the Financial Year : 2015-2016. By the time the Demand-cum-Show Cause Notice stood issued on 26.04.2021, a period of thirty months had already elapsed subsequent to the Financial Year : 2015-2016 and the Adjudicating Authority in order to obviate the bar of thirty months, had illegally resorted to the proviso to sub-section [1] of Section 73 of the Finance Act, 1994 and as such, the proceedings initiated by the respondent authorities are clearly without jurisdiction. 6.5. Detail information about the total Income Tax including Form 26AS, filed by the petitioner way back in the Year : 2015-2016, and the periodical ST-3 returns filed in the Year : 2015-2016 were very much within the knowledge of the respondent authorities. Therefore, the allegation of suppression of facts brought by the respondent authorities against the petitioner is wholly misconceived, without any basis and without any jurisdiction. It has been submitted that the allegation of differential taxable amount, Rs. 9,27,88,851/-, brought in by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should be relegated to prefer the statutory remedy of appeal. 7.1. As regards the Letter dated 04.09.2020, he has contended that a reference of the said Letter was made in the Demand-cum-Show Cause Notice dated 26.04.2021. The notice-assessee had submitted a Reply to the Demand-cum-Show Cause Notice on 17.02.2022. In the said Reply, the noticee-assessee did not make any whisper as regards non-receipt of the Letter dated 04.09.2020. After passing of the Order-in-Original, the petitioner preferred an appeal before the Appellate Authority and it was only in its Memorandum of Appeal, the petitioner had taken any plea as regards non-receipt of the Letter dated 04.09.2020. Thus, at the stage of preferring a second appeal which the petitioner has sought to avert by filing this writ petition, it is not open for the petitioner to raise any further plea as regards nonreceipt of the Letter dated 04.09.2020. For not raising any objection as regards non-receipt of the Letter dated 04.09.2020 at the time of submitting its Reply on 17.02.2022 during the original proceedings the petitioner is precluded from raising it again by the doctrine of waiver and acquiescence. 7.2. It is further conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to a number of authorities in support of their submissions. 9.1. Learned Senior Counsel for the petitioner in support of his submissions, has referred to the following decisions :- [i] Maharashtra Chess Association vs. Union of India, reported in [2020] 13 SCC 285; [ii] Godrej Sara Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority and others, reported in [2023] 3 SCR 871; [iii] Magadh Sugar and Energy Ltd. vs. the State of Bihar and others, reported in [2021] 9 SCR 284. [iv] Simplex Infrastructure Ltd. vs. Commissioner of Service Tax, Kolkata, reported in 2016 SCC OnLine Cal 571; and [v] Kellogg India Pvt. Ltd. vs. Union of India, reported in 2005 SCC OnLine Bom 1692. 9.2. The learned Standing Counsel, CGST has referred to the following decisions of the Hon'ble Supreme Court of India to buttress his contentions :- [i] Thansing Nathmal vs. the Superintendent of Taxes, Dhubri and others, reported in AIR 1964 SC 1419. [ii] The Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, reported in [2014] 1 SCC 603; [iii] M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and another, reported in [2023] 4 SCR 18; [iv] PHR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative remedy provided by the relevant statutes. It has been observed that Article 226 of the Constitution of India does not, in terms, impose any limitation or restraint on the exercise of power to issue writs. Exercise of writ powers despite availability of a remedy under the very statute which has been invoked and has given rise to the action impugned in the writ petition ought not to be made in a routine manner, yet, the mere fact that the petitioner before the High Court, in a given case, has not pursued the alternative remedy available to him/it cannot be construed as a ground for its dismissal. It has been observed that the High Courts, bearing in mind the facts of each particular case, have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it is required to be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eguard of the rule of law under the Constitution. The Courts have themselves imposed certain restrictions on the exercise of their writ jurisdiction to ensure that the jurisdiction does not become an appellate mechanism for all disputes within a High Court's territorial jurisdiction. The intention behind the self-imposed rule is if the High Courts are to exercise their writ jurisdiction widely so as to regularly override appellate procedures, they would themselves become inundated with a vast number of cases to the detriment of the litigants in those cases. The same would defeat the legislature's intention in enacting statutory appeal mechanisms to ensure the speedy disposal of cases. 15. The statute involved in Thansingh Nathmal vs. The Superintendent of Taxes, Dhubri and others, AIR 1964 SC 1419, was the Assam Sales Tax Act, 1947, which had provided a hierarchy of taxing tribunals competent to decide question as to the liability of the taxpayer under the said Act, with a right to have questions of law arising out of the order decided by the jurisdictional High Court. It is in the above fact situation, the Constitution Bench in Thansingh Nathmal [supra] has observed as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226 [See : State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86; Titaghur Paper Mills Co. Ltd. vs. State of Orissa, [1983] 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. Ltd., [2003] 2 SCC 107; and State of H.P. vs. Gujarat Ambuja Cement Ltd., [2005] 6 SCC 499]. 12. The Constitution Benches of this Court in K.S. Rashid and Sons vs. Income Tax Investigation Commission, AIR 1954 SC 207; Sangram Singh vs. Election Tribunal, Kotah, AIR 1955 SC 425; Union of India vs. T.R. Varma, AIR 1957 SC 882; Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment [See : G. Veerappa Pillai vs. Raman & Raman Ltd., AIR 1952 SC 192; CCE vs. Dunlop India Ltd., [1985] 1 SCC 260; Ramendra Kishore Biswas vs. State of Tripura, [1999] 1 SCC 472; Shivgonda Anna Patil vs. State of Maharashtra, [1999] 3 SCC 5; C.A. Abraham vs. ITO, [1961] 2 SCR 765; Titaghur Paper Mills Co. Ltd. vs. State of Orissa, [1983] 2 SCC 433; Excise and Taxation Officer-cum-Assessing Authority vs. Gopi Nath and Sons, 1992 Supp [2] SCC 312 ; Whirlpool Corpn. vs. Registrar of Trade Marks, [1998] 8 SCC 1; Tin Plate Co. of India Ltd. vs. State of Bihar, [1998] 8 SCC 272; Sheela Devi vs. Jaspal Singh, [1999] 1 SCC 209; and Punjab National Bank vs. O.C. Krishnan, [2001] 6 SCC 569]. 14. In Union of India vs. Guwahati Carbon Ltd., [2012] 11 SCC 651, this Court has reiterated the aforesaid principle and observed : [SCC p. 653, para 8] 8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law; [v] When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion; and [vi] In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with. The principle of alternate remedies and its exceptions was also reiterated recently in the decision in Assistant Commissioner of State Tax vs. M/s Commercial Steel Limited [Civil Appeal No. 5121 of 2021]. In State of HP vs. Gujarat Ambuja Cement Ltd, reported in [2005] 6 SCC 49, this Court has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by a writ court. A litigant cannot avoid the non-compliance of approaching the Tribunal which requires the prescription of fees and use the constitutional remedy as an alternative. * * * * * * 19. In the recent three-Judge decision in PHR Invent Educational Society [supra], decided on 10.04.2024, the Hon'ble Supreme Court has held as follows :- 15. It could thus be seen that, this Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or short-paid or erroneously refunded. As per sub-section [1] Section 73, where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, an Adjudicating Authority may, within thirty months from the relevant date, serve notice on the person chargeable with the Service Tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. The proviso to sub-section [1] of Section 73 has prescribed that where any Service Tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of : [a] fraud; or [b] collusion; or [c] wilful mis-statement; or [d] suppression of facts; or [e] contravention of any of the provisions of Chapter V of the Finance Act, 1994 or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the Service Tax or his agent, the provisions of the sub-section shall have effect, as if, for the words 'thirty months', the words 'five years' have been substitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally out of it that in all cases where a Demand-cum-Show Cause Notice under sub-section [1] or under the proviso to sub-section [1] of Section 73 of the Finance Act is to be issued such Demand-cum-Show Cause notice is to be preceded by a notice/summon in terms of Section 14 of the Central Excise Act, 1944, made applicable by virtue of Section 83 of the Finance Act, 1994, as a precursor. It can, however, be accepted that in the event a notice/summon of the nature contemplated in Section 14 is issued by the empowered officer under the above provisions of the Finance Act, 1994, it is also necessary to ensure service of such notice/summon on the noticee. 22.3. Moreover, by the Circular dated 11.11.2021, it has been clarified that a pre-show cause notice consultation shall not be mandatory for those cases booked under Chapter V of the Finance Act, 1994 for recovery of duties or taxes not levied or paid or short paid or erroneously refunded by reason of [a] fraud; or [b] collusion; or [c] wilful mis-statement; or [d] suppression of facts; or [e] contravention of any of the provision of Chapter V of the Finance Act, 1994 or the rules made thereunder with the intent to evade payment of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case due to claim and contrary claim, these are disputed questions of facts. It is settled that all questions of facts are to be decided by the Adjudicating Authority or the appellate authorities in the hierarchy, constituted by the statute, as such authorities are competent to deal with and decide on disputed questions of facts. The determination of such disputed questions of facts and to correct errors of fact fall within the province of the appellate authorities. As the said aspect is a disputed question of fact, this Court in writ jurisdiction is not required to embark on a fact-finding exercise on the said aspect. Therefore, it is accordingly observed. As an appeal is considered to be in continuation of the original proceedings and a writ proceeding is not considered so, the issue as to whether a fact which was not controverted or traversed in any manner initially, can be raised in appeal subsequently or not, or the petitioner is precluded to raise such issue by operation of the doctrine of waiver and acquiescence, can very well be gone into by the appellate forum as it can go into issues of law also. The recourse is very well available for the petitioner to approach und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est integra that in regard to a finding of fact recorded by a tribunal or authority, a writ of certiorari can be issued only if in recording such a finding, the tribunal or the authority has acted on evidence which is legally inadmissible or has refused to admit an admissible evidence or if the finding is not supported by any evidence at all, because in such cases the error amounts to an error of law. It is also settled that a pure error of fact, however, grave, cannot be corrected by a writ. It is not the case of the petitioner that the Demand-cum- Show Cause Notice was issued beyond the period of five years from the relevant date, thereby, making it a case as one without jurisdiction. Rather, it is the case of the petitioner that the Adjudicating Authority had issued the Demand-cum-Show Cause Notice by illegally extending the period of thirty months to five years. 27. Having regard to the provision contained in sub-section [1] and in the proviso to subsection [1] of Section 73 of the Finance Act 1994, it cannot be said that the Adjudicating Authority does not have the jurisdiction to issue a Demand-cum-Show Cause Notice within a period of five year from the relevant date if he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority. This Court is also the considered view that since the case of the petitioner is not one that the Adjudicating Authority has exercised the jurisdiction under the proviso to sub-section [1] of Section 73 without jurisdiction or in excess of jurisdiction or by assumption of jurisdiction where there is no such jurisdiction, such issue should be decided by the appellate tribunal first. 29. In Simplex Infrastructure Limited [supra], a demand was raised by a demand-cum-show cause notice invoking the extended period of limitation under the proviso to Section 73 of the Finance Act, 1994 on the ground of alleged suppression. Having considered the contents of the demand-cum-show cause notice, the learned Single Bench has held the view that a mere mechanical reproduction of the language of the proviso to Section 73 [1] of the Finance Act, 1994 does not per se justify invocation of the extended period of limitation. The notice must contain particulars of facts and circumstance in support of such allegation. The Court has found that the Department initiated an enquiry and issued letters to the petitioner from time to time and the petitioner was found diligent in responding to all the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-alteram partem with 'no notice', 'no opportunity' or 'no hearing' and a case where there is violation of a facet of the rule of audi-alteram partem where the plea is 'no adequate notice', or 'no adequate opportunity' or 'no fair hearing'. In the first category of cases, the order passed could be termed as invalid on the ground of total violation of the principles of natural justice. But it cannot be readily held so in the later category of cases as the effect of violation of a facet of the rule of audi-alteram partem would require examination from the standpoint of prejudice. Having regard to the fact situation obtaining in the case in hand, the Appellate Tribunal can very well examine whether the petitioner was given adequate notice or was afforded adequate opportunity or a fair hearing in the proceedings before the Adjudicating Authority and/or before the first Appellate Authority. The contention of the petitioner as regards non-consideration of its Letter dated 15.09.2023 is also to be considered from the above perspective. Since this Court is of the considered view that neither the Order-in-Original nor the Order-in-Appeal has been passed in total violation of the principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitioner/writ appellant against an Order-in-Original dated 09.09.2021 passed by the Principal Commissioner of Central Goods and Services Tax and Central Excise, Guwahati whereby a demand for an amount towards Service Tax along with equivalent amount of penalty in terms of Section 78 of the Finance Act, 1994 and penalty in terms of Section 77 of the Finance Act, 1994 were imposed upon the writ petition/writ appellant. The learned Single Bench had held that the statutory remedy of filing an appeal was available to the writ petitioner/writ appellant and therefore, the writ petition was not fit to be entertained. The Division Bench has affirmed the said expression of opinion of the learned Single Bench. A contention was advanced on behalf of the writ petitioner/writ appellant that a statutory pre-deposit was required to be made for filing an appeal and thus, the remedy was not efficacious. Such contention has been held by the Hon'ble Division Bench to be unworthy of credence because mere requirement of furnishing or making the pre-deposit with the appeal under the Goods and Services Act would not make the remedy inefficacious. It has been held that the remedy of appeal is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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